Marketing & Sales Metrics

ARR (Annual Recurring Revenue)

Annual run-rate of recurring revenue — the standard valuation metric for subscription businesses.

ARR = MRR × 12. So ₹2L MRR = ₹24L ARR. For B2B SaaS, ARR is the headline number — what investors, acquirers, and benchmarks track.

Indian SaaS milestones: ₹1Cr ARR (~₹8L MRR) is usually the seed-funding mark. ₹10Cr ARR (~₹80L MRR) signals Series A maturity. ₹100Cr ARR is unicorn-trajectory.

ARR includes: subscription contracts (monthly + annual). Excludes: one-time fees, professional services, implementation. New ARR (from new customers) + Expansion ARR (upsells) - Churned ARR = Net New ARR.

India context

Indian B2B SaaS valuations track ARR multiples: typically 5-15x ARR for sustainable growth, higher for hypergrowth. Pricing-aggressive Indian SaaS (₹999/month) need volume to hit ₹10Cr ARR — 10,000 paying customers minimum.

Examples

  • A SaaS at ₹2L MRR = ₹24L ARR.
  • From ₹24L ARR to ₹1Cr ARR requires 3.5x growth — typically 12-18 months of execution.

FAQ

Should annual prepayments count as ARR?

Yes — ARR captures the recurring nature regardless of billing frequency. ₹24,000 annual contract is ₹24,000 ARR (or ₹2,000 MRR).

What ARR multiple should I expect?

Public Indian SaaS at 8-12x ARR. Private at 10-25x ARR depending on growth rate. ARR isn't valuation — growth + retention drive multiples.

Is ARR the same as revenue?

No. ARR is the run-rate at a point in time. Revenue is what was recognized in a period. They diverge for new customers, churn, and seasonality.

Related concepts

MRRARPUexpansion revenuechurnACVLTV

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